The USPTO's bimonthly publication for the independent inventor community

Patent Reform: Good for Independent Inventors and Small Businesses

An Open Letter to the Independent Inventor and Small Business Communities from Under Secretary of Commerce and USPTO Director David Kappos

We at the USPTO are committed to providing America’s innovators with the tools you need to put your ideas to work. That means providing high quality patents in a timely manner and giving your inventions reliable IP protection. Independent inventors and small businesses do critical research and development every day, and the innovative goods and services you produce benefit society and fuel our economy by creating new businesses and jobs. My goal is to help you bring those goods and services to market, to build economic opportunity, and to maintain America’s place as the innovation capital of the world.

Innovation will play an even more critical role in the future of the American economy in the years ahead. To ensure that this happens, we need to have a more modern patent system. The pending patent reform bill (S. 515) will provide the USPTO with the tools it needs to effectively serve all inventors. I am well aware that some of you have reservations about the bill. And I know that there is a great deal of uncertainty within this community about the legislation itself. Let me be clear: I believe that patent reform will be good for the independent inventor and small business communities. And here’s why.

1. Lower feesAs you know, we currently offer a 50% discount for small entities and independent inventors in virtually every fee category. The filing fee is further reduced by another 50% for small entities and independent inventors who make use of our electronic filing system. And, the proposed patent reform bill will allow us to create a new “micro entity” category for individual inventors or very small entities that would enable us to further reduce other (non-filing) fees for these micro entities. This section of the legislation also grants the USPTO fee setting authority. Such provisions will enable the USPTO to process your applications more quickly, to continue to pursue initiatives targeted to the independent inventor and small business communities, and to make improvements to the provisional filing system and our antiquated IT system. Helping you to easily access information on your pending application is also important to us.

2. Faster patentsWhen you spend your hard-earned money on filing a patent application, you should be able to expect examination of your application in a reasonable time frame. The USPTO currently has a backlog of more than 750,000 applications and this backlog stifles innovation and restricts the growth of our economy. We have already begun to attack this backlog by introducing new pilot programs designed specifically for the independent inventor such as the “Project Exchange” – the patent application exchange program we announced last November. For those with multiple applications pending, this program gives you the opportunity to select one application of critical importance to you and receive expedited review of that application in exchange for permitting us to stop working on another application which may no longer be important to you.

3. Stronger patentsReforming the post-grant review process will be another benefit for the independent inventor community. It is in everyone’s interest to have a workable process for challenging patents that are overly broad or allowed without considering all of the relevant prior art. The patent reform bill will provide a fair, balanced, timely and cost-effective way to do this. The bill will help eliminate serial challenges or harassment of patentees. The bar will be set high so that patentees are not required to defend frivolous challenges, and so that USPTO resources are used only where serious patentability issues are presented. And if the threshold is met, the review will be completed within one year. The shorter post-grant review process created by the legislation will ultimately save inventors time and money by making a court challenge far less likely. Please remember that once your patent completes a post-grant review here at the USPTO, you will have a rock solid, blue-ribbon patent that will be respected by others and difficult to challenge in court.

4. First inventor is a false debateThere is a big misconception regarding “First Inventor To File” and I want to clear it up. The new process is not a “First To File” system; it is a “First Inventor To File” system and that is an important distinction. There has been concern in the independent inventor community that the new process will make it easier for an interloper to learn of your invention and beat you to the patent office with an application. Under the “First Inventor To File” system there is no risk of this happening because the interloper is not an inventor. All filers have to sign an oath and declaration under penalty of criminal sanctions. This leaves only the issue of simultaneous, non-collaborative invention—what we call interferences. The chances that a patent will be subject to interference based on a first to invent claim—that’s our current system—is .01%. In 2007—the most recent year for which we have statistics. The total number of interference cases for all applicants of all sizes that were decided based on a priority claim was seven! Of those seven decisions, only one involved a small or medium sized entity, and not a single one was won by an independent inventor who was the second to file. That means we already essentially have a first inventor to file system. Furthermore, all other countries in the world use a “First Inventor To File” system. The change in the Patent Reform Bill will streamline the process for you to acquire patent rights and reduce your costs in seeking rights outside of the United States as you consider entering the global marketplace. This change will make it easier for you to “go global” with your invention.

Change is never easy, and the legislative process always entails some trade-offs and compromises. But at the end of the day, I believe strongly that the pending legislation will be good for the independent inventor community, and I would urge you to support it.